The gold futures market is one of many futures in the future of the commodity that is contracted, which agrees to buy and sell gold at a certain price at a future date. The future of gold is also used as a way for gold producers and market makers to restrain their products against market volatility, and for experts taking advantage of similar movements in the market.
A precious metal futures contract is a legally binding contract to supply metal in the future at a unanimous price. Regarding quantity, quality, time and place of delivery, contracts are standardized through the Futures Exchange. Only the value is variable.
Hedgers use these deals as a way to handle the risk of prices on the expected purchase or sale of physical metal. They also provide fishermen the opportunity to participate in the markets by entering the exchange desired margins.
It can take two different positions: A long (purchase) position is an obligation to accept the supply of physical metal, while a short (sell) position is assumed. The vast majority of futures contracts are terminated before the date of delivery. For example, a long-time investor sells this position before the notice of delivery.